With a prepaid card, you can sign up for recurring monthly bill payments and direct deposit. If you don’t have access to a bank account or credit card, a prepaid debit card can help you manage your spending and build healthy financial habits. There are exceptions, but you should check the card terms to see which fees apply and if you can avoid any of them. The types and amounts of fees will vary depending on the card. Many prepaid debit cards include monthly fees, reload fees, ATM withdrawal fees and sometimes balance inquiry fees. Here are some common factors to consider when choosing the right prepaid debit card: Fees “It’s also a great solution for parents to use for children, as it sets clear parameters and has some built-in ‘guardrails’ to limit overspending.” How to choose the best prepaid debit cardīefore committing to a prepaid debit card, keep an eye on potential fees and compare how easy it is to add funds and access your account online. “While underbanked consumers benefit the most, employers can use prepaid debit cards for employees who don’t have a checking account,” said Jones. You can create a budget, manage your spending, use direct deposit, have a place to hold your funds and withdraw money from an ATM or bank teller, among other things. If you don’t have access to a traditional banking service or you need a convenient way to make or receive payments, a prepaid debit card can provide some of the benefits of a credit card or checking account without a credit check or more involved application process. Prepaid debit cards won’t grow your credit score If you plan to let your child use it, you’ll need to add them to the account as an authorized user. In most cases, you’ll need to be at least 18 to use these cards. You’ll need to verify personal information to activate your card, including your name, Social Security number, address, date of birth and phone number. While prepaid debit cards aren’t credit products, they do have eligibility requirements. Register your card to protect your funds against fraudulent charges.Use your card issuer’s website or mobile app to pay your bills and manage your finances.If possible, set up your paychecks for direct deposit. Avoid hitting reloading limits and paying reloading fees by looking for a card that offers convenient reloading locations.Look for a card that has in-network ATMs convenient to you to avoid ATM fees.Compare monthly fees with the card’s benefits to get the best card for your financial needs and spending habits.How to get the most out of your prepaid debit cardīy following these tips, you can maximize the financial benefits when selecting and using a prepaid debit card. But in contrast to a checking account, prepaid cards often come with several fees, such as reload fees, monthly fees, ATM withdrawal fees, transaction fees and others. Most prepaid cards offer some of the features you’d get with a checking account - you can pay bills, receive direct deposits, transfer money, withdraw funds at ATMs and deposit cash. “Prepaid debit cards are a safe and convenient way to access cash at ATM and transact on everyday items such as groceries, gas, transportation and bill payments for utilities, internet and mobile phones,” Jones said. However, unlike credit cards where you’ll accrue interest charges if you carry a balance, prepaid debit cards can prevent you from overspending, Jones said. You can add funds to a card online or at many retail locations like grocery stores and gas stations - though you’ll likely pay a fee. These cards are straightforward, and there’s no risk of going into debt: Funds you add are available right away, and the card will be declined if you try to spend more than you have. Prepaid cards aren’t linked to a checking account or credit line, so no credit check is required. Prepaid debit cards are often associated with major credit card networks, such as Visa, Mastercard or American Express, and can be used anywhere standard credit cards are accepted. What is a prepaid debit card and how does it work? You can’t redeem the rewards as actual cash during ATM withdrawals, but you can apply your cash-back balance to your next in-store or online purchase. Serve rewards you with 1% back on all your purchases, which hit your account as soon as the transaction settles. Not to be confused with the free reload card, the Serve American Express Prepaid Debit Account helps you earn cash back for purchases you would be making anyway - a true rarity for a prepaid card. Reload locations: Over 45,000 across the US Reward rates: 1% back on all online and store purchases Other fees: Card purchase is $1.50 at retail stores or free if ordered online ATM fee: Free at MoneyPass ATMs or $2.50 elsewhere
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